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Silicon Valley's biggest fraud, Elizabeth Holmes, is on trial

28 August 2021
Dan Ackermann

Jury selection begins Tuesday in the criminal trial of Elizabeth Holmes, the disgraced founder and former CEO of Theranos.

Why it matters: The case will draw a bright line between “fake it ’til you make it” and outright fraud.

Flashback: Theranos billed its tech as the holy grail of blood testing, making it possible to run hundreds of assays from just a pinprick.

  • It once was valued at $9 billion and raised more than $700 million from investors like Tim Draper, Carlos Slim and Rupert Murdoch. Its board included former Henry Kissinger, Jim Mattis and George Shultz.
  • The company struck partnerships with Safeway and Walgreens, and Holmes became a regular presence on national business magazine covers.
  • But a series of exposés by the Wall Street Journal's John Carreyrou revealed that Theranos' tech didn’t work as advertised, that it secretly used commercially available blood analyzers, and that it falsified information shared with regulators.
  • Since then, Holmes and the company have been sued by investors, Walgreens and the SEC. It’s also voided two years of test results and dissolved its operations.

Between the lines: The role of due diligence—or lack thereof—is a central point of failure in the Theranos story.

  • Theranos had just a couple of experienced VC investors and only two board members with medical experience (albeit not in phlebotomy).
  • Google Ventures founder Bill Maris once revealed that GV passed after a team member took a Theranos test at Walgreens (Holmes has disputed this).
  • Holmes cleverly used one credible supporter’s backing to get the next one, and then the next one, all while evading close scrutiny (or even sharing audited financials).
  • Notably, the company told prospective investors in 2014 that the company was on track to break even and generate $100 million in revenue. It brought in little more than $100,000 for that period.

The bottom line: Theranos is the biggest fraud to have ever come out of Silicon Valley, dwarfing other tales of malfeasance. It not only took investors for hundreds of millions of dollars, but it also put thousands of people's health at risk.

Transcripts show George Floyd told police "I can't breathe" over 20 times

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Newly released transcripts of bodycam footage from the Minneapolis Police Department show that George Floyd told officers he could not breathe more than 20 times in the moments leading up to his death.

Why it matters: Floyd's killing sparked a national wave of Black Lives Matter protests and an ongoing reckoning over systemic racism in the United States. The transcripts "offer one the most thorough and dramatic accounts" before Floyd's death, The New York Times writes.

The state of play: The transcripts were released as former officer Thomas Lane seeks to have the charges that he aided in Floyd's death thrown out in court, per the Times. He is one of four officers who have been charged.

  • The filings also include a 60-page transcript of an interview with Lane. He said he "felt maybe that something was going on" when asked if he believed that Floyd was having a medical emergency at the time.

What the transcripts say:

  • Floyd told the officers he was claustrophobic as they tried to get him into the squad car.
  • The transcripts also show Floyd saying, "Momma, I love you. Tell my kids I love them. I'm dead."
  • Former officer Derek Chauvin, who had his knee on Floyd's neck for over eight minutes, told Floyd, "Then stop talking, stop yelling, it takes a heck of a lot of oxygen to talk."

Read the transcripts via DocumentCloud.